It has been a long time now since Chris Anderson wrote his now famous post “The Long Tail” but my personal feeling is that only now, after almost eight years, we are seeing all the pieces of the theory of niches coming to the right place.

Anderson first described as niches became more commercially attractive due to lower production costs of digital goods. According to the vision behind the long tail, niches commercially compete with a traditional mass market approach since a market made of lots of small niches would equal the size of a mass market. This actually gives the possibility to exist even to those small digital producers with a loyal fanbase: if costs are low, even a few fans/clients would support a creative producer.

The substantial difference (or rather a substantial acceleration in this transition) that is emerging today is that niches and communities, are gaining a more and more active role in the inspiration, design, and, increasingly, even in financing and in the production itself of any product or service.

A market of peers

A particular case that I want to mention is that of Natalie Dawn. Natalie sings for the Pomplamoose, an indie music duo that emerged through myspace and youtube. In May 2011, she decided to release his first solo album. She thus launched his funding campaign at Kickstarter and, in just three days, she raised funding for more than 100k $, exceeding by five times the previously set target.

Just take a look at Kickstarter to understand how fast the independent creative industry is embracing this model with huge enthusiasm: there are dozens of works that are being funded in this amazing way and dozens of artists get a livelihood by their fans, which can now connect directly and personally through the internet.

Yet beyond the purely cultural production (music, movies, literature …) the power of crowfunding / nichefunding gave significant results: is from February 2012 the case of Double Fine adventures which is using kickstarter to fund the project to recreate a traditional point and click adventure (do some of you remember Monkey Island? I do!)

Well, the campaign reached the funding target (400 k $) in just eight hours (eight hours!) and now stands at more than 2M $ in funding.

The distribution of Funding for Double Fine adventures Kickstarter campaign

Doing the math you can easily see how already 70 000 people who substantially bought the game in advance (all supporters will receive a copy of the game when finished) providing an amazing funding to the project.

This case of massive niche support turned this project into a self-consistent economic relationship between creative producer-consumer and fans in which the creative work effort has, already, been substantially funded (the original goal was $ 400k) and everything that comes next will be a, conceptually less important, surplus.

This is plainly a niche of loyal fans and gamers of the 90’s financing one of the greatest poets of the genre, Tim Schafer, and preparing to be the main market and word of mouth engine for the very same final product (and remember, as a benchmark, The Secret of Monkey Island, has sold about 21M copies in its history).

However, the most inspirational part of this project lies in these few lines:

“2 Player Productions will be documenting the creative process and releasing monthly video updates exclusively to the Kickstarter backers. This documentary series will strive to make the viewer as much a part of the process as possible by showing a game grow from start to finish, with all the passion, humor, and heartbreak that happens along the way. Double Fine is committed to total transparency with this project, ensuring it is one of the most honest depictions of game development ever conceived.

There will be a private online community set up for the backers to discuss the project with the devs and submit their thoughts and feelings about the game’s content and direction, sometimes even voting on decisions when the dev team can’t decide. Backers will also have access to help test the game once a beta is available. “

This is the future of the creative development.

A relevant number of success stories of this paradigm exist also in the development of more traditional products such as hardware ones: the most famous case is that of the (perfect) Elevation Dock but we could also mention the phenomenal Ipod Nano Watch.

Production is in fact, you will forgive the term, tribalizing: it is increasingly self-consistent within a niche containing all production stages. The act of consumption itself becomes the act of economically and emotionally supporting your favorite crafter, artist or creative, their communities, their niche and their tribes.

A new Product Cycle

However, crowdfunding is probably only the first among the expressions of a paradigm still being defined: while production costs lowers, the niche needed to support production becomes reduced in size of and, with the narrowing of the audience, users gain an increasingly important voice in defining product requirements, style, use cases. In some cases the niche even participates directly in certain phases of the production.

The design and creation process is transforming every day more quickly into a co-design and co-creation participatory and collaborative process.

In the past, design has often aimed to translate individual needs into general ones: it aimed to build products that were economically viable only because of economies of scale. This habit inevitably reduced the product’s ability to adhere to our personal and unique expectations as individuals.

Instead we’re now seeing the birth of a living process in which, on the contrary, design communities spontaneously emerge from the mass by using collaboration tools – the so-called platforms – to co-design and co-create solutions with general characteristics that, later in the process, will be subject to actual hacking and adaptation cycles producing, only then, the perfect fit.

To clarify what I mean you look at the following figure:

A New Paradigm: design vs codesign

Software as a frontier and collaboration platforms

If the image is not enough to understand, think of the development of open source software, a process for which, co-design and co-creation, well beyond the having demonstrated their potential, are now the standard.

This lately sparked an ecosystem where developers communities as well as business organizations are involved in creating a basic software, or that meet common needs. Each of these actors then will transform, adapt, the common release – to all intents and purposes a good example of a common – to meet more specific requirements, whether the use of a logo or look& feel or the integration with an existing infrastructure.

If it’s true that the field of software development is ideal to apply these kind of collaborative processes – and they in fact established a benchmark also thanks to the maturity of the collaboration platforms like Git Hub – we should notice that the applicability is rapidly and pervasively penetrating other industries and manufacturing processes.

The democratization of 3D/Desktop printing as well as the birth of exchange and collaboration pools, both virtual like Thingiverse (community exchange and modification of public domain) or real like Techshops, are rapidly making the collaborative production scenario real also for traditional, tangible objects, made out of atoms.

This approach to production is likely intended to permeate every phase and aspect of the economy due to enormous advantages in efficiency. In fact, innovating in direct inspiration of a community – by definition more sustainable and participatory – is way more efficient if compared to the traditional innovation approach dictated by economic and market criteria.

Rather than create new demands the co-operative design process is about responding to them, rather than seeking innovation in the closed of R&D labs is about helping this ability to innovate to emerge directly by users and communities. This kind of approach dramatically shortens the distance between the emergence of a need (gap), and the formalization of the solutions and throws them immediately on the pitch in a continuous cycle of reformulation, adaptation and improvement, from scratch.

I don’t want to get long on this, but I’d recommend this piece by Michel Bauwens, recently published on AlJazeera, to anyone wishing to understand the whys and the implications that the emergence of this new model will have on global economy

I just want to quote a significant passage, about co-creation, which cites a co-creation project that is among the most interesting in technology, Wikispeed:

[…]shared innovation commons approach is used in physical production, where it combines an open-source approach with distributed machinery and capital allocation – using techniques such as crowd-funding and social lending platforms, […]

For example, the Wikispeed SGT01 a car that received a five-star security rating and can attain a fuel efficiency of 100 miles per gallon (roughly 42.5 kilometres per litre), was developed by a team of volunteers in just three months. The car is being sold for only $29,000, about a quarter of what a traditional industrial automobile firm would charge, and for which it would have needed at least five years of development and billions of dollars.[…]

Copyright and the cooperative advantage

The implications of a creative and production process almost radically switching to an actual sharing of the creation act are several. In this new framework, a solution is much more effective as it is:

Adaptive, editable, customizable, localizable, reusable

modular and capable of generating derivatives

capable to accommodate intuitions that arise by the daily adoption

prone to change and capable of re-iterate in re-production and innovation cycles as short as possible (ideally instantaneous)

If we now compare these characteristics with those typically dictated by the needs of consumer and industrial production culture, we find that the latter, in search of economies of scale and production line’s exploitation, always looked at:

massively producing the same products for all (or many)

having no or little interaction with users throughout the product life cycle

working against re-use, so far as by even designing products with a built-in expiry date

we can understand as the paradigm shift is indeed enormous

We are at a stage where manufacturing industry must find its way to interpret the concept of copyleft and distributed intellectual property: inspiration may arise from the experience ofthe creative industry where the powerful insights of Lawrence Lessig and the rise of Creative Commons made user participation flourish and led to the creation of the most dynamic economy of the digital age.

A formerly scarcity based market where you were needed to be able to produce hits (best sellers, billboard records or blockbuster movies) is now in a market based on abundance in which every artist can basically feed thanks the niche of his most loyals fans (as shown by Natalie Dawn case, reported at the beginning of the post).

To get more about this the friction between copyright holders aiming to defend an artificial scarcity, armed with draconian legislative initiatives, and the vision of an army of creatives from around the world, I would urge everyone to read this excellent post by Glyn Moody appeared recently on STIR.

Of course, when we talk of tangible goods, the concept of copyright, or rather patent, fails to model the involvement of communities in the production cycle, and it is, I’ld say fortunately, only partially applicable as recalled by Michael Weinberg on Slate a few days ago:

“in the universe of movies, music, books, and articles, the assumption is that you need permission to make use of just about everything […] After all, the difference between downloading a song legally and downloading it illegally largely comes down to whether the person who controls its rights gave you permission to do so.In the physical world, the assumption is just the opposite. In the majority of cases, you do not need anyone’s permission to copy, improve, or build upon an existing object. Broadly speaking, copyright does not apply to so-called “useful objects”—objects that do something besides look nice.”

We certainly do not need another struggle between innovation and those who hold the production monopolies to maintain inefficient advantage positions: this would arm one of the most promising movements in recent history, digital manufacturing and participatory design.

Beyond the legislation inadequacy, we must ask ourselves: is there any sense in protecting your competitive advantage with a patent when you are likely to be outperformed in efficiency and effectiveness by the innovation potential of communities and co-creation projects? Remeber Wikispeed.

The benefit, in fact what I call the Cooperation Advantage by no accident, is the ability of producers (being them individuals, communities, projects or commercial entities) to cooperate with the generalized society. The goal for creatives (defined as those able to create something) is to find a place within an ecosystem, to identify the right niche, a niche they can reasonably produce with and contribute value in exchange for a, not necessarily monetary but surely economic, counter-value.

I would say that the world of consumers is willing to play a role, to request their needs and not just pick from a shelf, no matter how this could be attractive or popular. People searches for emotions and a creative may make their dream real. Kickstarter in the end is micro credit, what small municipalities and foundations were supposed to do until the business involved became too attractive to remain pure and safe.
But it’s even more than that. It’s thinking differently, it’s admitting that all you need it’s fantasy like the small coin you used to put on carousel ride. Digital World is where Alice jumped in. Follow the rabbit dude! :)

Great article. Just a question: I think anyway that cooperation model and models like the Apple one that are very closed will and need to coexist. what is your opinion? At which extent the cooperation model will be adopted in the next 5 years?

My idea is that gradually cooperation will permeate every design and production field mostly thanks to its efficiency advantage. You cite apple as an example of closed cycle but at some extent it’s not the case: Apps are particularly good at innovating the product concept with infinite use cases and there’s a lot of people making a living on the apple ecosystem (around 5M accordingly to data shared in the last few days). Apple itself succeeded to establish as a “platform” and I think this has been decisive to its success.

So I am not sure about it is more efficient. I prefer to believe it make people far more passionate about it leading us to 2 facts. First they are ready to spend more time to this task. Second they will be better at it, because they -want- to do it (at the opposite of a job, where you may not have the same will) and also because their implication will probably be in a field that is related to their skills (not always of course). So maybe their is money saving in the process because people are not asking to be paid (not at all, low salary or not for all hours spent…) but this personalization of creation has a cost. It is hard to evaluate.

Ciao Adrien, thanks for sharing.
We are in the very initial stage of this analysis but p2p alternatives are emerging fast and this actually shows that some efficiency advantage IS real. We need to investigate how this process works.
I’m dealing with this in a successive post I will publish in the coming days about the new role of businesses (and productive actors) in this landscape.